Aug 23 2018

How Agencies Can Best Compete for MGT Act Funds

For agencies looking to grab a share of remaining IT modernization funding, federal technology leaders suggest focusing on projects with a clear return on investment.

Alongside the General Services Administration’s Centers of Excellence and the President’s Management Agenda, one of the key pillars of the Trump administration’s IT modernization agenda is the implementation of the Modernizing Government Technology Act.

Under the MGT Act, the head of each federal agency can establish working capital funds for IT modernization if they do not already have a working capital fund. Agencies can transfer and reprogram funds, including for the operation and maintenance of their legacy IT systems, and then use the money for a variety of projects. The funds can be used to improve, retire or replace existing IT systems to enhance cybersecurity and to improve efficiency and effectiveness; transition legacy IT systems to cloud or shared services; or adopt risk-based cybersecurity solutions.

Additionally, agencies can apply for money for IT modernization projects from a Technology Modernization Fund the GSA manages. In March, Congress appropriated $100 million for the TMF. Agencies can apply to get money from the fund to modernize their IT and make it more efficient and secure. A board set up by the Office of Management and Budget and chaired by Federal CIO Suzette Kent assesses and approves proposals from agencies. Agencies must reimburse the fund for any transfer of TMF money in accordance with the terms of a written agreement

In June, the TMF board awarded the departments of Energy, Housing and Urban Development, and Agriculture with funding for IT modernization projects, totaling $45 million among them, FedScoop reports.

So, how can agencies get a piece of the remaining $55 million? Federal IT leaders say that agency IT leaders should think like investors and have a clear plan in place.

Agencies Should Consider Return on Investment in IT Modernization

Speaking on a panel Aug. 21 at the FedTalks 2018 event in Washington, D.C., federal IT leaders said that agencies that want to position themselves to win funding from the TMF board should tailor their proposals to the criteria set out by OMB.

“Successful projects will demonstrate a strong execution strategy, technical approach and have a strong team with a demonstrated history of successful modernization efforts,” a February OMB memo states. “Agencies should, to the extent practicable, consider the adoption of commercial technology solutions in their proposals and provide a strong technical approach and acquisition strategy to implement those solutions.” Agencies are encouraged to submit proposals for common platforms and shared solutions or other modernization projects that will serve multiple components within a single agency or multiple agencies, according to OMB.

Federal Deputy CIO Margie Graves said on the panel that agencies should submit proposals that have a strong return on investment so the fund can be repaid, have buy-in from senior agency leadership, show that the agency has the talent in place to execute on it, and can address a cross-agency priority, such as cloud migration or moving off of old mainframe technology.

“Those are the kinds of things we are looking for, because if somebody goes first, you can force others to follow in their footsteps with much more alacrity,” Graves said.

In the first round of awards, the Energy Department received $15 million to accelerate its enterprise cloud email migration; HUD got $20 million for a “mainframe application migration” project; and the USDA received an extra $10 million for its portal, as FedScoop reports.

Small Business Administration CIO Maria Roat, a TMF board member, said proposals should not reiterate the agency’s mission, and instead get to the point. Proposals that show the agency has buy-in from its CFO or has a contract that can be let out quickly are more likely to be viewed favorably, she said. Additionally, proposals that ask for smaller amounts of money to hit clear milestones within defined periods of time are also a good bet, she said.

On that note, Roat said agencies should not apply to TMF for projects that would use a huge portion of the remaining funds. For those, “you're not going to get all of the money when you take up a third or half of the money,” she said. “We’re looking for a little bit smaller chunks, and we want to see some wins.”

Energy Department CIO Max Everett said the TMF process improves federal IT management, and he advised his colleagues to apply for funds. “The reality is, this is the way we should be managing federal IT across the federal government,” he said. “If agencies aren't going to go after the rest of that money, I am.”

Everett said the Energy Department focused its winning cloud email migration proposal “on a realistic outcome we could execute on, that would be tangible in the timeframe.” The department knew the costs of the migration, which it had validated with industry, and knew the ROI of moving to the cloud, he said.

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